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The Fear and Greed Index returns to fear for the first time since October
The sharp decline in the price of Bitcoin has led to a significant deterioration in sentiment among cryptocurrency traders.
The Crypto Fear and Greed Index, which reflects the overall emotional background of the cryptocurrency market, fell to 43, the lowest level since last October.
Source: Alternative.me
The indicator has moved from the greed zone, where it was just a week ago, to the fear zone, signaling growing investor anxiety. Fear is indicated on the scale by a value between 26 and 46. At these levels, bearish sentiment is assumed to prevail.
Capital outflows from the United States continue ETFs weigh on the market. The net outflow of funds from the spot Bitcoin ETF for May 1st amounted to a record $564 million, the highest amount since the products launched in January.
However, analysts at Santiment stay optimistic about the future of BTC price. Experts noted that the market correction was predictable, given the growth in Bitcoin’s capitalization before the halving. Since the halving in late April, investors have been buying on rumors and selling on news.
According to analysts, the growth of Bitcoin market in October 2023 and early spring 2024 was caused by high expectations regarding the halving. However, those who bought BTC at the end of March, when the price was at an all-time high, remained at a loss.